How Technology Stocks Have Influenced Broad Value Indexes

Morning Star09-09 00:00

Large tech stocks have started to find their way into broad value indexes. Index construction is part of the reason, but the fundamentals of some technology companies have changed a lot over the past ...

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Index construction is part of the reason, but the fundamentals of some technology companies have changed a lot over the past ...</p>\n\n<a href=\"https://www.morningstar.com/funds/how-technology-stocks-have-influenced-broad-value-indexes\">Source Link</a>\n\n</div>\n","source":"morningstar_fund_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Technology Stocks Have Influenced Broad Value Indexes</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Technology Stocks Have Influenced Broad Value Indexes\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-09-09 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.morningstar.com/funds/how-technology-stocks-have-influenced-broad-value-indexes><strong>Morning Star</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Large tech stocks have started to find their way into broad value indexes. Index construction is part of the reason, but the fundamentals of some technology companies have changed a lot over the past ...</p>\n\n<a href=\"https://www.morningstar.com/funds/how-technology-stocks-have-influenced-broad-value-indexes\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://www.morningstar.com/funds/how-technology-stocks-have-influenced-broad-value-indexes","article_id":"2666584105","we_media_id":null,"thumbnails":["https://media.morningstar.com/resizer/v2/JOBKWXQJJRD6FCXXL33ZTQJWEQ.png?auth=33c7ecf95200483e3b0a83e5cf8bba3b19a461d1879e0d905b86bf3970edbd5d&quality=80&height=1350&width=2400&crop=0,0:2400,1350"],"rights":{"source":"morningstar_fund_highlight","url":"https://www.morningstar.com/funds/how-technology-stocks-have-influenced-broad-value-indexes","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2666584105","pubTimestamp":1788883200,"columns":[],"sourceInfo":{"source_id":"morningstar_fund_highlight","name":"Morning Star"},"weMediaInfo":null,"summary":"Source: Morningstar Direct. Data as of May 31, 2026. Download CSV.In other words, the recent additions of Amazon.com, Apple, or Microsoft didn’t cause the increase. Smaller tech stocks already in the Russell 1000 Value went on a tear over the 12 months leading up to the rebalance. Their revenue and earnings grew with demand for the semiconductors and memory chips they develop and manufacture, and their market caps and valuations increased accordingly.The table below shows the rate of return of the largest technology stocks in the Russell 1000 Value over the 12 months leading up to the June rebalance. Alphabet’s GOOGL 102% return was the smallest of the bunch.Source: Morningstar Direct. Data as of Aug. 31, 2026. Download CSV.Meanwhile, Amazon.com returned about 7% and Apple 37%, while Microsoft lost almost 28% over the same period. Their fundamentals and prices looked a lot less growthy than the eight stocks in the previous table. Cheap TechThe extreme growth of the former eight combine","collect":0,"end_time":0,"defaultTopTitle":"morningstar.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"科技股如何影响广泛的价值指数","themeId":null,"isJumpTheme":false,"ttsUrl":"https://static.tigerbbs.com/9a7fa1f683482b1c855b1a16d2713d38","symbols_score_info":{"OPTZ":0.6,"DRMY":0.6,"TTXU":0.6,"AMAU":0.6,"AMZZ":0.6,"GOOX":0.6,"AMA":0.6,"FXL":0.6,"MULL":0.6,"MACW.SI":0.6,"GAMR":0.6,"AMD":1.85,"CGGO":0.6,"EGGY":0.6,"AMDC":0.6,"VGT":0.6,"GOU":0.6,"MSFD":0.6,"CNAV":0.6,"SMU00main":0.6,"GGLL":0.6,"MRVU":0.6,"MSFW":0.6,"GOOW":0.6,"MSFC":0.6,"AAPL":1.93,"ABFL":0.6,"QQQA":0.6,"AIQ":0.6,"SAMZNmain":0.6,"MSFT":1.92,"IETC":0.6,"MSFL":0.6,"QQQG":0.6,"MU":1.85,"AMDS":0.6,"AIFD":0.6,"DTCR":0.6,"WDCC":0.6,"METV":0.6,"IXN":0.6,"LTL":0.6,"FSMD":0.6,"VOX":0.6,"NULC":0.6,"MVLL":0.6,"FAI":0.6,"XLC":0.6,"COWG":0.6,"DISK":0.6,"GOGL":0.6,"IWD":1.91,"GOOY":0.6,"DAMD":0.6,"GGLS":0.6,"BAI":0.6,"IOSX":0.6,"DRIV":0.6,"MRVL":1.85,"ILDR":0.6,"HULL":0.6,"SMSFTmain":0.6,"04336":1.85,"AMDY":0.6,"AAPD":0.6,"SOXQ":0.6,"AMZN":1.94,"TRFK":0.6,"SNDU":0.6,"USAW.SI":0.6,"FDTX":0.6,"AMZU":0.6,"AMDG":0.6,"XDAT":0.6,"SMHX":0.6,"INT":0.6,"SNDG":0.6,"AIS":0.6,"OGIG":0.6,"LINT":0.6,"AAPW":0.6,"CHPX":0.6,"AZYY":0.6,"SPTE":0.6,"EPAI":0.6,"FTEC":0.6,"AMZD":0.6,"SCHA":0.6,"TEK":0.6,"MUG":0.6,"AMDW":0.6,"CHPS":0.6,"GOOL":0.6,"AMUU":0.6,"AMDD":0.6,"MUU":0.6,"CNEQ":0.6,"SKYY":0.6,"AAPB":0.6,"SNPE":0.6,"AAPU":0.6,"USXF":0.6,"AMYY":0.6,"TINY":0.6,"AMZO":0.6,"SOXX":0.6,"TDV":0.6,"CHAT":0.6,"AMAT":1.85,"TYLG":0.6,"AAPX":0.6,"ARTY":0.6,"INTW":0.6,"MSFY":0.6,"AMZG":0.6,"CQTM":0.6,"AMZP":0.6,"AMDL":0.6,"WISE":0.6,"XNTK":0.6,"MSFO":0.6,"JGRO":0.6,"SAAPLmain":0.6,"APLY":0.6,"XLK":0.6,"CLIX":0.6,"SINTCmain":0.6,"PTF":0.6,"AMAA":0.6,"GTEK":0.6,"GXPC":0.6,"ROM":0.6,"PSI":0.6,"RTH":0.6,"TTEQ":0.6,"SNDK":1.85,"04335":1.84,"FCOM":0.6,"TDIV":0.6,"AMZW":0.6,"TRUC":0.6,"TMSL":0.6,"FTXL":0.6,"WDCX":0.6,"GOOP":0.6,"RDVY":0.6,"MUZ":0.6,"GOOGL":1.88,"BOBP":0.6,"MSFU":0.6,"SNDC":0.6,"WDC":1.85,"APMI":0.6,"LEGR":0.6,"SNXX":0.6,"WUGI":0.6,"MUD":0.6,"SMH":0.6,"EFIV":0.6,"MUYY":0.6,"AAPY":0.6,"IGV":0.6,"MIC":0.6,"INTC":1.84,"MSFX":0.6,"MRVX":0.6,"SCHM":0.6,"SOXY":0.6,"FCUS":0.6,"AAPE":0.6,"AMZY":0.6,"EMSF":0.6,"SHOC":0.6,"INYY":0.6,"VT":0.6,"WANT":0.6,"HBMX":0.6,"SNDQ":0.6,"RDVI":0.6,"CMAG":0.6,"WLDR":0.6,"RULE":0.6,"SAMD0main":0.6,"AMDU":0.6,"ONLN":0.6},"content_text":"Large tech stocks have started to find their way into broad value indexes. Index construction is part of the reason, but the fundamentals of some technology companies have changed a lot over the past year, along with their prices and valuations.Keeping ScoreRussell Indexes rebalanced its popular benchmarks in late June. In any given year, the rebalance gets a lot of attention because many large index funds track Russell indexes, and a lot of active managers benchmark themselves to the same bogies. Said another way, there’s a lot of money tied to the trades that occur when these indexes turn over, making the Russell rebalance among the busiest trading days of the year.This year, the rebalance received more attention than normal because three large tech stocks claimed the largest positions in the Russell 1000 Value. Amazon.com AMZN became the largest constituent after its weight jumped to 5.80% from 1.72%. It’s a consumer stock but close enough to technology that it’s worth mentioning. Apple AAPL and Microsoft MSFT were added as well, and the stakes weren’t small. Apple’s 5.27% position made it the second largest in the index, followed by Microsoft’s 3.88%. Holding large tech stocks isn’t unique to the Russell 1000 Value. The S&P 500 Value index tracked by iShares S&P 500 Value ETF IVE and the S&P 900 Value index tracked by iShares Core S&P Value ETF IUSV had similar large stakes in Apple and Amazon.com.Furthermore, technology stocks have always been a part of the Russell 1000 Value and other broad value benchmarks. On average, they occupied about 10% of these indexes over the past 15 years, but that has changed over the past 12 months. The information technology sector grew to almost 20% of the Russell 1000 Value, and that happened before the June rebalance.\n\t\t\tTechnology Stocks in the Russell 1000 Value\n\t\t       Source: Morningstar Direct. Data as of May 31, 2026. Download CSV.In other words, the recent additions of Amazon.com, Apple, or Microsoft didn’t cause the increase. Smaller tech stocks already in the Russell 1000 Value went on a tear over the 12 months leading up to the rebalance. Their revenue and earnings grew with demand for the semiconductors and memory chips they develop and manufacture, and their market caps and valuations increased accordingly.The table below shows the rate of return of the largest technology stocks in the Russell 1000 Value over the 12 months leading up to the June rebalance. Alphabet’s GOOGL 102% return was the smallest of the bunch.\n\t\t\tChip Manufacturers Led the Charge\n\t\t       Source: Morningstar Direct. Data as of Aug. 31, 2026. Download CSV.Meanwhile, Amazon.com returned about 7% and Apple 37%, while Microsoft lost almost 28% over the same period. Their fundamentals and prices looked a lot less growthy than the eight stocks in the previous table. Cheap(ish) TechThe extreme growth of the former eight combined with the tepid growth of the latter three helps explain why Amazon.com, Apple, and Microsoft sit atop the Russell 1000 Value. Those three are no longer the growth leaders of the broader market, and all sit in the middle of the Morningstar Style Box .Index construction also plays a role. Index providers, including Russell, split the market into value and growth buckets, and they typically use several growth and value indicators to determine where a stock lands. The value and growth metrics used to classify stocks, along with the approaches to cutting the market in half, vary from one index provider to the next, but the basic idea applies to all mainstream value and growth indexes.There is always a group of stocks that land in the middle. They aren’t quite value stocks, and they don’t quite fit in with pricier growth names. Amazon.com, Apple, and Microsoft were straddling the line between value and growth during the June rebalance, so the rules underpinning the Russell 1000 Value split their market caps between the two indexes. Furthermore, Apple and Microsoft had larger weights in the Russell 1000 Growth than the Russell 1000 Value. Micron Technology MU, Applied Materials AMAT, Advanced Micro Devices AMD, Sandisk SNDK, Western Digital WDC, and Marvell Technologies MRVL graduated out of the Russell 1000 Value and became members of the Russell 1000 Growth. Intel INTC stayed put. All benefited from the demand for memory chips and have grown immensely over the past year. Alphabet gets partial consideration. It jumped out of value and into growth as well, but it sits in the communication services sector.While the individual names changed, technology did not take over Russell 1000 Value at the rebalance. The sector’s weight remained largely the same, while others saw modest changes. Industrials declined by a few percentage points because heavy equipment manufacturer Caterpillar CAT became a growth stock. Likewise, communication services lost 3.8 percentage points because Alphabet was pushed into the Russell 1000 Growth. Consumer cyclicals increased by 4 percentage points because Amazon.com’s weight increased by a similar amount.\n\t\t\tRussell 1000 Value Sectors Reshuffle After the Rebalance\n\t\t       Source: Morningstar Direct. Data as of Aug. 31, 2026. Download CSV.Forests & TreesThe Russell 1000 Value, and other broad value indexes like it, did exactly what it is supposed to do. It shed expensive stocks that have grown and added those that were relatively cheaper. Much of the trading at Russell’s June rebalance happened to take place around the technology sector.Broad value indexes still possess many of the characteristics that have defined the cheaper side of the market for decades. Their average valuation is lower than their growth counterparts, and they still place more weight on cyclical sectors of the economy. The financial, consumer cyclical, and industrial sectors still hold prominent positions.Tech stocks have always been a part of the value index. Their weight has increased, but that’s because they’ve done well across the board and not because a few big names entered at the last rebalance. The companies that sit within those sectors have changed, but the indexes are just capturing that dynamism as they always have.Large stakes in Amazon.com, Apple, and Microsoft are likely more relevant to active managers in the large-value Morningstar Category  than they are to investors in a passively managed exchange-traded fund tracking the Russell 1000 Value. Some of those active managers now have to consider the influence of prominent tech stocks on the benchmark they’re competing against.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"isLaohu8Offline":false,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.49.0","shortVersion":"4.49.0","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2666584105","isCrawlerRequest":true}